Spot bitcoin ETFs see largest daily outflows in four months following record Binance hack

U.S. spot bitcoin Bitcoin (BTC) exchange-traded funds recorded their largest daily net outflows in four months on Friday, following Thursday's $6.3 billion hack at Binance.

According to SoSoValue data, spot bitcoin ETFs saw $643.3 million in net outflows on Friday, marking their largest single-day outflow since June 25. Their outflows for the week ending Oct. 30 amounted to $202.6 million.

Spot Ethereum Ethereum (ETH) ETFs saw $155.9 million in net outflows on Friday, their largest since Oct. 7. The ether funds reported $431.5 million in weekly outflows.

The ETF outflows came after Binance was hit by the largest crypto hack to date. Attackers, whom the FBI has identified as North Korean hackers, drained about $6.3 billion from Binance's hot wallets on Thursday.

The crypto exchange said it recorded roughly $3.64 billion in net outflows in the first nine and a half hours after it began restoring withdrawals on Sunday.

Bitcoin rose 1% over the past 24 hours to trade at $78,491 as of 11:20 p.m. ET Sunday, while ether climbed 1.3% to $2,296, according to The Block's crypto price page.

Market confidence

Jeff Ko, chief analyst of ViaBTC, told The Block that he views the ETF outflows as more of a "sentiment shock."

"Spot ETF holders have no direct exposure to Binance, since the underlying BTC is held with regulated custodians. And in context, a roughly $640 million outflow is actually modest against the total ETF assets," said Ko.

Rick Maeda, head of markets at Laevitas, shared similar views, noting that Friday's outflow was relatively small compared with the ETFs' total net assets of $98.14 billion.

"In scale, the $643 million outflow is still under 1% of spot BTC ETF assets so this was simply a de-risking day, and not capitulation or a loss in institutional confidence," said Maeda.

Still, analysts expect investor caution to persist in the near term. 

"Taking a look at a similar precedent of Bybit's Q1 2025 hack, I would expect stabilization or modest outflows in the near term rather than a snap-back as long as the hack can be contained at its current situation," Maeda added.

Dominick John, analyst of Zeus Research, also said that the near-term demand is likely to remain cautious, "with a sustained recovery in ETF inflows dependent on improved market stability, restored liquidity and stronger investor confidence."

The Crypto Fear and Greed Index stood at 37 on Sunday in the fear territory. 

"The current sentiment in crypto seems to be one of caution rather than fear," said Maeda. "Markets will be headline-sensitive as traders look for updates regarding the hack as well as the macro calendar such as the U.S. midterms." 

Ko also pointed to the midterm elections as another key event.

"BTC has absorbed the hack quite resiliently," said Ko. "Attention is now shifting toward U.S. midterm elections, where the balance of power in Congress could have meaningful implications for how crypto market structure legislation moves forward."